The National Association of Securities Dealers, which controls the Nasdaq Stock Market, is considering trading electronic futures contracts on U.S. Treasury bonds under a for-profit arrangement with several major investment firms. The move would put the NASD in direct competition with the Chicago Board of Trade and other futures exchanges.
Advanced Micro Devices, Intel's main rival in microprocessors, said it will post a much larger than expected loss for the second quarter, citing a sharp decline in prices and lower shipments for its K6 processors. Sunnyvale, Calif.-based AMD said it will post an operating loss in the range of $200 million for the quarter ending June 27. Based on about 146 million shares outstanding, the loss will come to about $1.37 a share. Wall Street analysts had been expecting a loss of about 40 cents a share, according to First Call, which tracks estimates.
The Senate Commerce Committee, with only Sen. Ron Wyden (D-Ore.) dissenting, approved a bill that would require the Transportation Department inspector general to ensure that airlines comply with a voluntary passenger-rights accord they unveiled last week. Among other things, the airlines committed themselves to telling passengers of the lowest fares available, providing prompt ticket refunds, and informing passengers of known flight delays and cancellations. Wyden complained that the bill gutted a stiffer proposal made earlier this year by himself and Sen. John McCain (R-Ariz.), the committee chairman.
At the urging of the Securities and Exchange Commission, the mutual fund industry plans to unveil today a list of proposed reforms to strengthen the role that independent board directors play in protecting the interests of investors. An advisory group of the Investment Company Institute will release the reforms, which would not be binding but would nonetheless put enormous pressure on any fund that set its standards lower. Among the recommendations are that at least two-thirds of directors be independent, that former officers and directors not serve as independent directors of the fund, that independent directors be selected by current independent directors and that fund directors invest in the fund on whose boards they serve.
Yields on two-year Treasury notes rose in auction to 5.754 percent, the highest level in nearly two years. The yield was 5.315 percent at the last auction on May 26. The notes will carry a coupon interest rate of 5.75 percent with each $10,000 in face value selling for $9,999.30.
Bear Stearns made a new offer to settle a Securities and Exchange Commission investigation of whether the firm aided in fraud at the now-defunct brokerage A.R. Baron by clearing its trades. The investment bank would agree to charges it assisted in A.R. Baron's violations of securities laws under the proposed settlement, said people familiar with the matter. It would pay more than $10 million to settle, according to the Wall Street Journal, which first reported the plan.
Metromedia Fiber Network of New York, which is building fiber-optic networks in the United States and overseas, said it will buy AboveNet Communications of San Jose for about $1.55 billion in stock, making faster Internet connections available to customers.
American Airlines will absorb recently acquired Reno Air into its system Aug. 31, even though American and its pilots union have yet to end a bitter dispute surrounding the $124 million Reno Air purchase. American, owned by AMR, bought Reno Air as part of its major expansion in the West. Reno Air is flying as a separate entity under AMR's ownership.
Lehman Brothers agreed to pay $100,000 to settle allegations it violated rules about how the New York-based firm distributed four hot new stocks and other securities reporting requirements, the National Association of Securities Dealers said. NASD alleged Lehman, the fourth-largest U.S. investment bank by capital, sold shares in four initial public offerings to accounts that were restricted or were supported by inadequate documentation about who owned them. Lehman neither admitted nor denied the allegations.
Talking ATMs for the blind will be developed by Wells Fargo, a spokesman for the California bank said. The automated teller machines will give voice instructions on how to deposit money, withdraw cash, transfer funds and buy stamps. They will also come equipped with special audio jacks, with the bank providing headsets to keep financial information private. The project is the result of a joint partnership between Wells Fargo and Co. and the California Council of the Blind. Both groups say they believe it is the first such plan in the United States.
Florsheim Group chief executive Charles J. Campbell resigned Tuesday, six weeks after a former assistant filed a lawsuit accusing him of entertaining mistresses at a corporate apartment and having sex in company-leased limousines. Campbell denied the allegations last month, saying an investigation would vindicate him. Officials with the Chicago-based shoe company said the investigation is over, but would not release details; the lawsuit has been settled.
Swissair will divest its 4.6 percent stake in Delta Air Lines, but the company said it is in no hurry to do so. Based on Delta's current market capitalization of $8.2 billion, the stake would be worth about $380 million. The airline said the decision wasn't related to the recent marketing alliance formed between Swissair, Swiss Air Transport, AMR's American Airlines and Sabena SA's Sabena Belgian World Airlines.
DaimlerChrysler, the world's largest truckmaker, "strongly" denied a report that it's in talks to acquire Sweden's Volvo, while a separate report renewed speculation that Volkswagen is wooing the other Swedish truckmaker, Scania.
Goldman Sachs Group, which became a public company last month, said fiscal second-quarter profit from operations rose 30 percent to $624 million, as revenue from trading and underwriting equities and advising on mergers jumped. Goldman's results exclude a $2.26 billion charge related to share grants to employees when the firm went public and a $200 million charitable contribution.
Telecommunications executive Craig McCaw said he and his family will invest about $315 million in Nextel Communications as part of an earlier deal to take up to a $1.16 billion stake in the company. The investment would come through exercising options to purchase 17 million shares of the Reston company at a pre-determined price, McCaw said in a statement. McCaw also said he would sell about 7 percent of his Nextel shares, or 15,000 shares a day, for the next 200 trading days, to help pay down debt resulting from the earlier investment in Nextel and to help offset the cost of exercising the options.
Iridium has announced it has terminated a contract to purchase Claircom Communications Group, a provider of in-flight telephone services, for $65 million. The Washington company said "the acquisition would not be consistent with current commercial priorities."